The two banks will not provide any banking services to customers starting Thursday.
RBI has taken this step considering the lack of adequate capital and income potential with the two cooperative banks.
The Reserve Bank of India (RBI) on Wednesday took a major decision. It has cancelled the banking licences of two cooperative banks in Maharashtra and Karnataka. The central bank said it has cancelled the licences of Buldhana-based Malkapur Urban Co-operative Bank Ltd. and Bengaluru-based Shushruti Souharda Sahakara Bank Niyamita Reports state that these two co-operative banks have been closed to performing any bank-related work after Wednesday.
The regulatory bank has taken this step considering the lack of adequate capital and income potential with these cooperative banks. After the decision of the RBI, these banks will not be able to provide any banking services to customers starting Thursday, July 6.
Now the question arises: is it safe to keep money in cooperative banks? Reports suggest that in case of bank sinking or bankruptcy, the only relief the depositor has is the insurance cover provided by the Deposit Insurance and Credit Guarantee Corporation, i.e., DICGC. Now insurance coverage under DICGC is available up to Rs 5 lakh. DICGC cover is available for all banks but one has to register for this facility and pay the insurance premium.
According to the information provided by Malkapur Urban Co-operative Bank, the RBI-determined that 97.60 per cent of depositors are entitled to receive their entire deposits from DICGC. Of the total insured deposits, Rs. 496.98 crore has already been paid out by DICGC. On the other hand, for Shushruti Souharda Sahakara Bank Niyamita, the RBI stated that 91.92 per cent of depositors are entitled to receive the full amount of their deposits from DICGC.
However, the insurance cover provided by DICGC works on deposits like savings accounts, FDs, current accounts, and RDs. DICGC’s Deposit Insurance covers all insured commercial banks, including LAB, PB, SFB, RRB, and cooperative banks. If your money is deposited in a bank, you can check whether it is registered for deposit insurance or not by clicking on the link: https://www.dicgc.org.in/FD_ListOfInsuredBanks.html.
For all the latest business News Click Here
